Skip to content

Opinion: True cost of new arena is $50 million

'If this project is ultimately approved by council, debt servicing will force a 2% increase in your taxes for the next 20-years'
20180814 Gary Gardiner
Mayoral candidate Gary Gardiner. Supplied.

The community centre project cost estimate is now in at $50M.

That’s right, a mind-blowing, fifty million dollars! 

Building a community centre is apparently expensive and unfortunately, North Bay’s application to Investing In Canada Infrastructure Canada was denied several months ago  (the federal government does not fund arenas as the city probably should have known all along).

The setback, however, does not seem to matter.  Councillor Johanne Brousseau, chair of Community Services, has given the green light for City staff to prepare a “go-it-alone” funding proposal for council’s consideration this week. Part of the plan is to borrow $31.68M.  Everyone is familiar with a mortgage, so imagine, based on an optimistic 2.25% interest rate spread over a 20-year term, the borrowing cost will be around $8M.  So that gets added to the cost of the project.

At the special community centre zoom meeting last week, council seems to have been focused on the pre-tendered construction cost, which architect Marc Downing, confirmed to be $35M.  But of course, the project has other associated costs such as $2M for architect’s fee, a new driveway entrance off Lakeshore Drive, various soft costs such as the completed geotechnical investigation, MURF studies, etc. and once constructed there are probably provisions for furniture, computers, and equipment. 

So here’s the math and true cost.

The long-term capital plan pegs the total community centre project cost at $39,975,000 (page 2, line 4); the new driveway comes in at $2,150,000 (page 7, line2); then of course there is the “special debt” of $31,680,000 specific to the Community Centre (page 12) and it is my estimate (not staff as they declined to speculate) that the borrowing cost would be at least $8M.  So in the interest of full disclosure and transparency, the complete cost of the project will be at least $50M.

If this project is ultimately approved by council, debt servicing will force a 2% increase in your taxes for the next 20-years (just for this project alone).  And then of course there are annual operating costs, which will be substantially higher than the West-Ferris Arena (to be decommissioned at some point) so this will also add more pressure on the general tax levy.

But, and this is a BIG BUT, if council votes to go to tender, there are no guarantees that the construction cost of $35M will hold true.  The pandemic has drastically disrupted material supply chains.  In some cases, materials are not available for months so demand is driving prices significantly upward.  So how many more millions is council willing to spend? $50M could easily turn into $55M.  Imagine the campaign slogan for the 2022 municipal election campaign ... “not a million more”.

I fully support the need for a true community-centric focused facility. But “going-it-alone” is not the answer.  There are other options out there.  I wish Coun. Brousseau all the best as she is sincere in her objective.  But I strongly disagree with the $50M price tag.  I imagine that voters will agree.

Gary Gardiner